28. October 2020

A world without waste, in which our throwaway society is a thing of the past: the idea of a circular economy is not new, but still sounds like a distant utopia. However, thanks to their work on the Sustainable Development Goals, many companies are now realizing that a regenerative supply chain offers not only ecological, but also economic and social benefits. Thanks to digital and decentralized platforms such as TRUST&TRACE, cradle-to-cradle strategies have the appropriate infrastructure for data-based implementation and can thus bring a breath of fresh air to our ecosystem and economy.

The basic goal of the circular economy is to minimize waste by keeping products in the economic cycle as long as possible before these products are finally recycled. But how exactly does this work in business practice? First things first, a corresponding corporate strategy needs a clear and feasible concept based on the three R’s: reduse, reuse and recycle. Recycling is always considered only as a last resort. Prior to this, it is examined whether the life cycle of a product can be extended by alternative resource use or repair. When the product is finally recycled, more attention is paid to returning the individual components of a product to the manufacturing process, thus closing the cycle in the best possible way.

In its Circular Economy Concept, the Ellen MacArthur Foundation also distinguishes between biological and technical cycles: Biological cycles focus on food or raw materials such as wood or cotton, which are returned to the cycle through composting or anaerobic digestion. In this way, they can be used as renewable resources in economic production processes. Technical cycles, on the other hand, serve to restore processed products or recover materials contained in products. This is done through processes such as reuse, repair or recycling.

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The concept is most easily understood using a practical example: the life cycle of a lithium-ion car battery. E-mobility is on the advance; more and more registered electric vehicles will be on the roads in the next few years. But the power of the rechargeable batteries is limited, the energy content drops by up to 30 percent after more than ten years of use. So, what happens to batteries used in cars when their performance declines? In terms of the circular economy, these batteries should not be recycled, but led into a second phase of life. This “second life” must be planned before the battery is manufactured. To this end, the European Commission in 2018 developed a strategic action plan, which, among other things, deals with the production and reuse of batteries in the sense of the circular economy.

After all, even batteries that only have around 70 percent of their original capacity can be reused. One of the main areas of application is stationary storage: batteries are used wherever electricity from non-constant energy sources, such as solar or wind power, needs to be stored. This can be in residential houses, industrial buildings but also in larger areas. In the Port of Hamburg, for example, there is a large-scale storage facility made from such batteries that stores electricity from renewable energy sources and makes it available for further use. Here the batteries can be used meaningfully for a long time before they are finally recycled.


But as good as the basic principle of the circular economy may be, many companies find it difficult to implement corresponding processes into their daily business. One of the reasons is the lack of valid data: Without continuous data collection, storage and processing, it is impossible to ensure the flow of information throughout the entire life cycle of a product. Many supply chains are not transparent at all levels and product information is distributed among many stakeholders without forming a big picture. Another point is that sensitive data often cannot be shared securely with other companies because the necessary infrastructure is lacking. In case of the battery it is difficult to track at the end of its life how the battery was produced, what exact quantities of materials were used in the production process and how the battery was used and maintained throughout its life cycle. If this data were available without restriction, recycling processes could be made much more efficient in terms of the circular economy.

The software TRUST&TRACE addresses this data problem and offers companies a transparent and secure data exchange: on the basis of a decentralized blockchain platform, the life cycle of products can be mapped completely digitally, while at the same time the collected information can be securely shared with partners. The key to this is the so-called digital identity, which makes each product uniquely identifiable and accompanies it throughout its entire life cycle. In case of the battery, this means from the production process along the supply chain, through its use as a car battery and energy storage device in the “second life” to recycling. All data collected during this life cycle is stored in the digital identity. The decentralized block chain approach enables the data to be documented and processed by several business partners in a trustworthy and tamper-proof manner. Companies thus receive valid and complete data on the origin and use of their products, on the basis of which they can ensure their compliance and quality standards. Moreover, they can significantly simplify the recycling process at the end of the product life cycle.

Do you have questions on how to integrate TRUST&TRACE into your corporate strategy on circular economy? Please feel free to contact us and arrange a free consultation appointment, our product experts are happy to help out. Mail to [email protected] 

Milan Schlegel
PR Manager and Content Creator | [email protected] | +49 176 47161036